Macau business daily, Mar, 30, 2015

MOP 6.00 Closing editor: Joanne Kuai Publisher: Paulo A. Azevedo Number 759 Monday March 30, 2015 Year III

All in the family

Prices under observation

T

hree highly placed officials in two gov’t departments. The Commission Against Corruption is investigating two senior officials of the Marine and Water Bureau accused of accepting bribes. Meanwhile, the Secretary for Social Affairs and Culture has disclosed that his Office is investigating a case of nepotism. An official with the Cultural Industries Fund is accused of helping relatives land lucrative subsidies. The Secretary said the results will be announced to the public PAGE

5

Feb visitors post new record

Still walking on thin ice.

People’s Bank of China governor Zhou Xiaochuan issued a warning yesterday.

Advising that the inflation index should be closely monitored in order to spot any sign of threatening deflation

Page 11 ICBC injects US$360 mln into Macau unit to boost competitiveness

Page 4

A record-breaking high of 1.14 million Mainland visitors travelled to Macau on the Individual Visit Scheme in February.

A soaring 38.9 per cent year-on-year hike.

Overall, Mainland visitation jumped 11 pct.

Although regional and long-haul visitation by other jurisdictions is notably dropping off. Regardless, 5.14 million total visitors arrived in the first two months of 2015, up 1.5 pct Y-o-Y

Rosário: Urbanisation of North Taipa problematic

Page 5 Landing posted loss of HK$343 mln in 2014

Page 7

Page 2

Spread bet “Challenging market conditions”. But Melco says it has nevertheless “maintained steady growth”. A variety of new local and international projects in the pipeline is lending the company resilience. And strengthening its industry presence, it says.

Melco International Development Limited recorded profit attributable to owners of the company of US$191.78 million for the year ended 31 December 2014

Page 7

China may further open securities market to SAR investors

Page 10

HSI - Movers March 27

Name

%Day

China Resources Land

5.04

China Overseas Land

3.53

Sino Land Co Ltd

1.46

BOC Hong Kong Holdin

1.44

Belle International

1.39

China Construction B

-1.10

Industrial & Commerc

-1.26

China Mobile Ltd

-1.33

Hengan International

-1.69

Lenovo Group Ltd

-1.77

Source: Bloomberg

www.macaubusinessdaily.com

INTERVIEW

I SSN 2226-8294

Economic reality Economist Albano Martins is adamant. The gov’t should regulate the overheated housing market. Especially with the influence of declining gaming revenues possibly taking years to feed through to real estate. Mr. Martins sees the ‘invisible hand’ of the central gov’t shaping the slowdown of gaming here, he tells Business Daily. If left unchecked, gaming would overpower other industries. Economic policy is not implemented to make money for the government, he asserts. Rather, it is to control the market in order for it to be compatible with economic reality

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2 | Business Daily

March 30, 2015

Macau V Air to launch flights to Macau from April 10 V Air, a low-cost carrier unit of Taiwan’s TransAsia Airways, will launch a new route between Taiwan and Macau on April 10, its third international destination after Thailand’s Bangkok and Chiang Mai, reports Taiwan News Agency CNA. The airline said it will operate three round trips to the SAR per week until early June, when daily services will be implemented. To celebrate the new service, V Air said it will launch promotional sales between April 1-3, offering 3,800 NT$888 (US$28) tickets online, which can be used between April 10 and May 13. The budget airline, which was established in November 2013, said it also plans to fly to Indonesia, Malaysia, Japan and South Korea in the future.

Independent Mainland visitors surge 39 pct in February Maybe it really is time for so-called ‘non-gaming elements’. Despite gaming revenues plunging nearly 49 per cent year-on-year in February, visitor numbers kept climbing, especially those of Mainland tourists, who jumped 11 per cent Kam Leong

kamleong@macaubusinessdaily.com

Visitor arrivals for February 2015

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he city received a recordbreaking high of 1.14 million Mainland visitors travelling on the Individual Visit Scheme (IVS) in February, a soaring 38.9 per cent year-on-year hike, according to the latest data released by the Statistics and Census Service (DSEC) on Friday.

Driven by the Chinese New Year, Macau recorded a total of 2.68 million visitor arrivals last month, up 4.5 per cent compared to the same period last year. Nevertheless, more than a half, 58 per cent, or some 1.6 million, were same-day tourists.

The increase in the total visitor arrivals is credited to Mainland tourists, of whom 1.9 million visited last month, representing a year-onyear increase of 10.7 per cent, and accounted for more than 70 per cent of the total number.

In particular, 60 per cent of these Mainland tourists visited the Special Administrative Region via the IVS, posting a new single-month record for Macau.

Nevertheless, the continuous rising number of Mainland tourists has triggered concerns about the capacity of the city. A tourism capacity report by the Macau Government was recently submitted to the central government, hoping to improve the

current IVS scheme for Mainland tourists.

In addition, a report released by the Institute for Tourism Studies (IFT) last week on the tourism capacity of Macau in 2013 and 2014 also indicated that Macau’s capacity to absorb visitors reached saturation point in 2014, which is also the first time that Macau’s tourism capacity decreased after years of stable increase.

Half of the huge numbers of Mainland tourists – just short of a million souls at 965,127 - came from Guangdong Province. This province was also the largest source of IVS tourists, at 809,488, or 84 per cent of those visiting Macau via IVS. Zhejiang Province and Fujian Province, meanwhile, accounted for the second and third largest proportion of Mainland tourists visiting Macau, amounting to 64,430 and 58,351 of the total, respectively.

Losing out in charm offensive However, the city’s second biggest source of tourists – Hong Kong – continued to post fewer numbers of tourists. The DSEC data indicates that visitors from Hong Kong during February fell 5.2 per cent year-onyear, reaching 522,796, despite still

Source: DSEC

accounting for nearly 20 per cent of the total visitor number.

Meanwhile, visitors from Taiwan, another primary source of Macau tourists, slightly increased by 1.4 per cent year-on-year, at 74,176 last month. South Korea, a popular new source of visitors, posted an increase of 7.3 per cent year-onyear, amounting to 56,240.

Nevertheless, visitors from other Asian countries - such as Japan, Thailand and Malaysia - all registered sharp decreases, by 34.8 per cent, 44.7 per cent and 46.8 per cent yearon-year, respectively.

Macau’s charm for long-haul visitors has also been reduced as tourists from the United States, Australia, Canada and the United

Kingdom all registered a year-onyear decline last month, according to DSEC. On the other hand, DSEC data indicated that 85.3 per cent of the total number of visitors, amounting to 1.35 million, entered the territory of Macau through the Border Gate, which represents a jump of 13 per cent year-on-year.

Another main entry point for tourists was the Outer Harbour, which received 915,999 visitors, despite representing a decrease of 8.9 per cent year-on-year.

Cumulatively, visitor arrivals for the Special Administrative Region reached 5.14 million in the first two months of this year, up 1.5 per cent year-on-year.

Business Daily | 3

March 30, 2015

Macau More than 9,600 visitors attend 2015 MIECF 2015 Macao International Environmental Co-operation Forum and Exhibition (2015MIECF) concluded on Sunday. The three-day event attracted over 9,600 visitors, with an increase in the number of trade visitors compared to last year. During the three-day event, agreements on 28 co-operation projects were signed. A total of 296 green matching sessions were held in the business matching area. According to participants, MIECF has successfully played its role as a green platform to promote regional and international development and co-operation. The next MIECF will be held from 31 March to 2 April 2016.

February unemployment rate 1.7 pct Since December 2013, it has not changed for 15 consecutive months

M

acau’s unemployment rate between December 2014 and February 2015 continued to stand at 1.7 per cent, as it has for the last 15 consecutive months, the latest data from the Statistics and Census Service (DSEC) reveals.

In these three months, the total labour force of Macau was 403,400, which is down by 1,100 from the previous period, despite the labour force participation rate remaining at 74 per cent.

In fact, according to DSEC, the unemployment rate of the Special Administrative Region has not changed since December 2013. The underemployment rate also remains stable, at 0.4 per cent.

The total employment of Macau in the three months was 396,500, representing a decrease of 1,300 from November 2014 to January 2015.

DSEC said the decrease may be due to the hotel and restaurant industries

as well as similar activities and the construction industry seeing fewer demands for their labour force.

Meanwhile, the number of unemployed was 6,900, a period-onperiod increase of 200; 9.2 per cent of the total unemployed are fresh labour

forces still searching for their first job in the city. However, the proportion of fresh manpower accounted for by the total unemployed decreased by 2.1 percentage points.

In terms of year-on-year comparison, both the unemployment

rate and the underemployment rate remained constant while the labour force participation rate increased by 0.6 percentage points.

The gaming industry, together with recreational and cultural services, continued to account for the greatest proportion of the total labour force at 24.1 per cent of the total.

Meanwhile, another 14.6 per cent of total manpower was working in the construction field in the three months, followed by 13.7 per cent working in hotels, restaurants and similar activities.

The other three main industries of the city in terms of number of employees were the wholesale & retail trade, real estate & business activities, and public administration & security, of which the number of workers account for 11.1 per cent, 7.8 per cent and 6.8 per cent of the total, respectively.

K.L.

4 | Business Daily

March 30, 2015

Macau

ICBC injects US$360 mln into Macau unit to boost competitiveness The capital injection is to comply with capital adequacy requirements as well as to boost the market position of ICBC Macau, said the parent bank Stephanie Lai

sw.lai@macaubusinessdaily.com

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he Industrial and Commercial Bank of China Ltd (ICBC) is making a capital injection of US$360 million (MOP2.88 billion) into its subsidiary ICBC Macau, to ‘further improve the market position and competitiveness’ of the Macau unit.

‘The purpose of the capital injection is to comply with new regulatory requirements of capital adequacy and to improve market position and the competitiveness of the bank in Macau,’ said ICBC in the filing. ‘The capital injection is consistent with strategic development plans for the bank and is beneficial to the long term and sustainable development of the bank.’

Upon completion of the capital injection, which is funded by its internal cash resources, ICBC expects to continue to hold 89.33 per cent

of the shares in Industrial and Commercial Bank of China (Macau) Ltd., the Chinese bank said in its latest filing with the Hong Kong Stock Exchange.

The capital injection is still subject to the approval of the

China Banking Regulatory Commission, ICBC said.

The branch of Bank of China (BoC) in Macau is the largest bank operating here in terms of share of deposits, according to Business Daily calculations regarding the

balance sheets of local banks published in the Official Gazette.

As at the end of last year, BoC Macau had a total of MOP341.4 billion in deposits considering current accounts, time deposits and public sector

deposits. BoC’s represents 42.4 per cent of the total market that accounts for around MOP805.8 billion, followed

by ICBC Macau (18.4 per cent) and Tai Fung Bank (9 per cent) in third place.

As at the end of 2014, the commercial bank ICBC Macau held net assets of US$1.46 billion, with its realised net profit reaching US$222 million, its parent said in the filing.

The ratio of ICBC Macau’s non-performing loans maintained a low 0.05 per cent for last year, the Chinese bank’s Macau unit revealed on Thursday.

ICBC Macau was formed via a merger between Seng Heng Bank and the Macau branch of ICBC in July 2009 with registered capital of MOP461 million, of which ICBC holds an 89.33 per cent stake.

McMacC o. Ltd. (McDonald’s Macau)

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Business Daily | 5

March 30, 2015

Macau Earth hour, lights off Many establishments in Macau, including casinos, shops, government departments and other facilities, will once again join global efforts in the observance of Earth Hour on March 28 by switching off lights on their properties for one hour to raise awareness of climate change.

Organised by the World Wildlife Fund for Nature (WWF), Earth Hour has grown into a global movement with millions of supporters in more than 7,000 cities across 162 countries since its inception in 2007.

Investigation into gov’t officials transferring benefits, accepting bribes A vice director and a department head of the Marine and Water Bureau are under investigation. The Commission Against Corruption said the two officials are suspected of accepting bribes. Meanwhile, an official with the Cultural Industries Fund has been accused of helping relatives get public money Kam Leong

kamleong@macaubusinessdaily.com

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ecretary for Social Affairs and Culture Alexis Tam Chon Weng revealed last Friday that a leader of the Cultural Industries Fund is suspected of having helped families secure government subsidies.

According to Secretary Tam, who claimed the case was reported by the industry, the Secretary’s Office has started an initial investigation into the related parties, the result of which will be announced to the public.

The Cultural Industries Fund was set up by the government in 2014 with the objective of supporting the development of the local cultural and creative industries by putting MOP200 million into the fund. At the beginning of this month, the Fund announced that 86 businesses from the first batch of 361 applicants would be awarded a total of MOP110 million.

Meanwhile, the head of the Fund, Leong Heng Teng, who is also government spokesperson, declined to comment on the issue last Friday on the sidelines of an introduction session by the Fund which is opening for a second batch of applications tomorrow.

Mr. Leong claimed that the case has not yet been confirmed and that individuals are not currently undergoing disciplinary procedures, indicating committee members of the Fund had handled the applications based on the related regulations and guidelines.

Asked by reporters whether there is any loophole in the avoidance system of the Fund, the government spokesman denied this is so, telling reporters that four of the total firstbatch applicants were applied for

avoidance acts, stressing what should be avoided had already been avoided, according to local broadcaster TDM radio.

He also said that the subsidies for the first-batch of applicants have not yet been handed out.

Marine and Water Bureau officials accused of bribery Meanwhile, the city’s graft watchdog Commission Against Corruption (CCAC) announced on Saturday that two officials of the Marine and Water Bureau are accused of receiving bribes.

Without elaborating, CCAC said it would release updates to the public when there is further progress on the case.

CCAC said in a press release that

the two officials’ public works have already been terminated and they have been banned from leaving the Special Administrative Region.

The Bureau, meanwhile, announced in a press release on Saturday evening that it was deeply concerned about the case and will continue to assist the CCAC investigation.

Whilst attending a public event, Secretary for Transport and Public Works, Raimundo Rosário, confirmed to reporters that the vice director and a department head are currently under investigation. Due to the ongoing judiciary proceedings, he declined to comment further on the case but vowed that the Bureau will fill the positions as soon as possible and try to minimise the impact on the Bureau’s work. One vice director of the Bureau is Vong Kam Fai.

Rosário: Urbanisation of North Taipa problematic The Secretary for Transport and Public Works says that the area of north Taipa is not like newly reclaimed land, with many plots privately-owned, which will cause challenges for infrastructure building Joanne Kuai

joannekuai@macaubusinessdaily.com

D

uring the fourth plenary meeting of the Urban Planning Committee last Friday, plans for nine plots of land were discussed. Several of the plots are located in Taipa. Committee members suggested that in the North Taipa area, in order to avoid digging up roads and repetitively disrupting traffic the infrastructure establishment should be unified and construction organised and conducted in more or less the same timeframe.

The president of the Urban Planning Committee, also acting as Secretary for Transport and Public Works, Raimundo Rosário, said that in the area many plots are private land and that there are many existing buildings, acknowledging that urbanisation of the area may face many difficulties in the future.

Discussions on two more controversial plans were postponed. One of them involves the city centre in the World Heritage Site next to St. Paul Ruins. The property

owner has applied to rebuild his house and make it higher.

Many committee members opposed the idea, saying it would disrupt the harmony of the heritage site.

Another plot is located opposite Hotel Ponte 16, where the old neighbourhood is in need of gentrification.

Committee members also pointed out that maintaining the old town’s original look is important and questioned the Cultural Affairs Bureau having different standards regarding protecting cultural heritage.

6 | Business Daily

March 30, 2015

Macau

Macau Legend announces 6 pct drop in profit for 2014 The Macau-based casino and hotel operator points to the launch of its Harbourview Hotel as a factor impacting its last year’s profits Stephanie Lai

sw.lai@macaubusinessdaily.com

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asino and hotel operator Macau Legend Development Ltd. has seen its profits for 2014 decrease by a year-onyear 6 per cent to HK$478.94 million (US$61.8 million) on the back of reduced earnings in the gaming segment, said the company in annual results submitted to the Hong Kong Stock Exchange on Thursday.

Accounting for the decrease in profits, the firm said it was ‘mainly due to the recognition of pre-opening expenses of Harbourview Hotel of approximately HK$24.1 million and the current year’s unrealised exchange loss on bank fixed deposits denominated in RMB’.

The 4-star Harbourview Hotel - comprising 444 rooms and the first of three new hotels established on the waterfront of Macau

Fisherman’s Wharf - had its grand opening on February 11. The hotel does not house any gaming facilities but is connected to the Babylon Casino in the waterfront theme park via footbridges.

Last year, Macau Legend’s revenue increased by 2.7 per cent to HK$1.81 billion, of which its gaming segment accounted for HK$1.28 billion or 71 per cent of overall revenue.

The gaming services

firm’s adjusted earnings before interest, taxation, depreciation and amortisation (EBITDA) went down by 4.4 per cent to HK$842 million, according to the filing.

Macau Legend, which operates Pharaoh’s Palace Casino at Landmark Hotel and Babylon Casino, saw its gaming profit drop nearly 7 per cent to HK$805.7 million against the background of weaker earnings in the mass gaming segment.

The firm’s mass gaming revenue decreased by a year-on-year 4 per cent to HK$1.09 billion for last year; while its revenue from VIP gaming tables increased by 38 per cent to nearly HK$176 million.

Of the VIP gaming revenue, Macau Legend said about HK$58.2 million was earned by its New Legend Club.

In July, Macau Legend shareholders approved a variable-interest-entity (VIE) agreement between wholly-owned subsidiary Hong Hock Development Co. Ltd. and the VIP gaming promoter New Legend VIP Club Ltd., which enabled Macau Legend to ‘indirectly participate in the gaming promotion business’, and ‘have a greater control over the management and marketing of New Legend’.

While the firm’s selfrun New Legend registered HK$58.2 million in VIP revenue for last year, offset by the decrease in the mass gaming segment, the firm said it will ‘remain vigilant’ to capitalise growth in the VIP segment through the VIE structure.

Macau Legend’s nongaming profit posted a 122 per cent rise to HK$46 million on the back of a 9.5 per cent increase in this segment’s revenue at HK$531 million.

‘The increase in nongaming revenue was primarily attributable to the increase in income from hotel rooms at the Landmark Macau upon completion of renovation of the hotel and increase in licensing and building management income at the Landmark Hotel as well as Rocks Hotel,’ said Macau Legend of its performance last year.

Business Daily | 7

March 30, 2015

Macau

Melco: Maintaining steady growth, development in pipeline Melco’s 2014 profit decreased 6.9 per cent year-on-year to HK$1.49 billion Joanne Kuai

joannekuai@macaubusinessdaily.com

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elco International Development Limited has announced its annual results for year ended 31 December 2014. The group recorded profit attributable to owners of the company of HK$1.487 billion (US$191.78 million) for the year ended 31 December 2014, as compared to HK$1.597 billion the previous year.

Net revenue and adjusted property EBITDA amounted to US$4.8 billion and US$1.286 billion, respectively.

“Despite the more challenging market conditions during the past year, Melco has maintained steady growth with its distinctive and

exciting expansion not only in Macau but also in other parts of Asia,” said the Group Chairman and CEO of Melco, Lawrence Ho, in a statement: “With projects developed in Macau and overseas, Melco has further strengthened its industry presence and become an international marketleading operator in the gaming, leisure and entertainment industry.”

The group is pushing forward with projects in its pipeline, including a gaming and resort development project, in which Melco has an interest, scheduled to open in Russia’s Primorye Region in 2015 and the pursuit of casino projects

in Barcelona in Spain as well as the Republic of Georgia.

“In Macau, we have enhanced our portfolio and our expansion plan remains on schedule. The Hollywood-inspired gaming and entertainment complex Studio City is due to open in the third quarter of 2015,” said Lawrence Ho. “City of Dreams is to be further enhanced with the addition of the expanded retail area, which is currently under development and set to open in the first half of 2016.”

The Board distributed an interim dividend of HK11.6 cents per share (six-month period ended 30 June

2013) and recommended a final dividend of HK7.5 cents per share for the year ended 31 December 2014.

The total dividends for the year amounted to HK19.1cents per share (2013: HK20.8 cents per share) in an aggregate amount of HK$297.2 million, representing approximately 20% of the profit attributable to the owners of the company for the year ended 31 December 2014.

The company says it has maintained a healthy financial position during the year with gearing ratio recorded at 10% as of 31 December 2014 and 2013.

Dairy Farm buys San Miu to expand in China

Landing posts loss of HK$343 mln for 2014

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sian retail giant Dairy Farm International Holdings has announced the purchase of Macau-based supermarket chain San Miu to further increase its expansion in the Chinese market.

‘The acquisition of San Miu reinforces Dairy Farm’s retail presence in Macau, and complements its well established convenience store and health and beauty businesses in the territory,’ the company said in a press release.

Dairy Farm didn’t disclose the amount paid for San Miu, a supermarket chain that operates 15 mass market outlets in Macau with an average store size of 9,500 square feet.

Dairy Farm is a leading panAsian retailer; the group and its

associates and joint ventures operate over 6,100 outlets and employ over 100,000 people. The total amount of sales last year surpassed US$13 billion. The company has a network of supermarkets, hypermarkets, convenience stores, health and beauty stores and home furnishings stores under well-known brands. In Hong Kong, for example, it has a 50 per cent stake in Maxim’s, a famous restaurant chain in the city.

San Miu said it is going to maintain the name of the supermarket chain as well as the operation mode.

The company will inform business partners and put up notices. Business Daily has approached Dairy Farm for more details regarding the deal but received no reply by the time this story went to press.

hina real estate developer Landing International Development Ltd. continued to post a loss in 2014 to the tune of more than two times its loss in 2013, amounting to HK$343 million (US$42.9 million), it told Hong Kong Stock Exchange last Friday.

The filing of the company indicated that its turnover for its fiscal year ended December 31 2014 had reached HK$223 million, yet a loss attributable to equity holders of the company of HK$294 million was recorded, compared to a loss of HK$137 million in 2013.

The group said the loss it posted was due to four main reasons; namely, administrative expenses in connection with its newly acquired

casino business, pre-construction administrative expenses for the integrated resort development, increases in other operating and administrative expenses due to group expansion, as well as an impairment of goodwill recognised during the year.

The newly acquired casino business of the group refers to its casino project in South Korea named Jeju Casino, which held its grand opening on January 18, 2015.

According to Landing, Jeju Casino is now operated under the trade name of Genting Jeju and currently has 26 baccarat tables, one blackjack table, one tai sai table, one roulette table and 16 slot machines.

K.L.

8 | Business Daily

March 30, 2015

Macau “If the Government openly admits that house prices are too high then they need to act” The government should adopt measures to bring the housing market back to acceptable levels as the effects of the slowing gaming sector may take years to be felt in the market, Albano Martins told Business Daily. The economist also believes that the central government’s ‘invisible hand’ is behind the slowdown as gaming would overpower other industries if left unchecked João Santos Filipe

jsfilipe@macaubusinessdaily.com

This situation where gaming is at the top of the economy is not likely to change in the following 20 or even 50 years. The diversification will be led by the gaming industry and SMEs will grow connected to the gaming industry. Now the government is going to ask gaming concessionaires to use more products made in Macau and that is a good policy.

However, as a result if something happens to the gaming industry everybody in Macau will suffer the consequences. The government has to understand this and take a cautious approach when it comes to deciding upon gaming related policies. The policies will have to make sure that the investment in gaming is not highly risky and that means creating stability in the sector. This includes discussion of the gaming licences.

Last week, the 2015 Policy Address by the Chief Executive of the Macau Government was delivered. What was your impression of the speech by Mr. Chui Sai On?

The ideas revealed by Chui Sai On are not very specific and I believe it’s better to listen to the Secretaries because they should be more specific about the tasks for the year. From the Chief Executive’s remarks, there is an effort by the government to differentiate [itself] from the previous one.

Chui Sai On said houses prices are going down this year. But he also stressed he will not take any new measures regarding the housing market apart from building the public units previously announced. Do you support this position?

We should not wait for miracles. If the government really wants prices to go down then they should have clear indicators of the price ranges for different types of houses in the different areas of Macau. The SAR Government is always ready to regulate any market, but then when it comes to the housing market it has a completely different attitude.

If the government admits openly that prices are too high then it needs to act.

Then why do you think that the government believes that prices will go down without the need for them to act?

The government is waiting for prices to go down due to the decline in gaming revenues. But one thing will not necessary lead to the other.

We went through a recession and a housing market bubble bursting period before and it did not end up reducing prices immediately.

This happened because the players in the market were prepared to endure some years without selling because they were not in urgent need of funds. The last thing investors want is to lose money and after buying some of the houses at a time that prices were high they will try to wait for the market to recover before selling. So instead of cutting prices this will cut market supply.

The government is considering introducing another type of public housing, as mentioned by the Chief Executive. Do you believe this will force house prices down?

By increasing supply there is the opportunity for prices to cool down.

My opinion on housing is that the government should act and this includes providing houses for the middle class. I believe that by providing houses for the market, prices will be competitive again. By bringing to the market houses at

controlled prices the government is pushing the prices of the houses already in the market down.

The government may not generate money with this policy and even lose money with it but this is how you are supposed to approach economic policies. Economic policy is not implemented to make money for the government but rather to control the market in order for it to be compatible with the economic reality of the region. The economic reality of Macau is about low salaries and the median of salaries in the region is relatively low to accommodate the prices of the market.

In addition, more in the past years than now, the fact that the MOP is pegged to the US dollar, which has been losing value in relation to the yuan, also penalised Macau and the property market. I believe that in relation to this, the government sooner or later will unpeg the MOP from the US dollar. Probably, this won’t happen until 2049 because of the Basic Law and of the Joint Declaration.

But I believe this change will be welcomed because the Macau economy is more and more close to the Mainland economy... Even the economic diversification is related to the Mainland.

Inflation has been increasing by 5 to 6 per cent in recent years…

Speaking of economic diversification, how can you achieve this when gaming is such a strong industry in Macau?

This isn’t a good sign for the Macau economy as well because such inflation overheats the economy.

Companies have a lot of freedom in Macau when it comes to setting prices and in some cases I would not be surprised if they were fixing prices between themselves. For instance, there are some oligopolies like the import of food from Mainland China. This was also seen in the controversy surrounding fuel prices. The market should be free but it has to be regulated by certain rules. It isn’t acceptable that a free market that is following trends in prices is completely opposite to the reality of foreign markets.

Can these price increases be explained by internal factors alone or are external factors affecting prices that are more complex for the government to control?

We have problems in the real estate sector, as we’ve been saying. However, it’s also worth mentioning that many of the products for building houses come from Mainland China and many of these prices have been going up.

I don’t have many expectations for the diversification of the economy.

This is a word that is used in government guidelines all around the world. We’re in a small region where an industry takes the largest portion of land. This industry creates a lot of added value for the region and is led by some of the smartest minds in the territory. It’s difficult to compete against this, and the economic diversification will have to be made in connection with the gaming industry. It will have to be related to non-gaming entertainment.

I believe the government is doing the right thing in having the Cotai resorts accommodating many nongaming entertainment activities.

Also, because the gaming sector is one of the top consumers of products in Macau, other industries and services produced can grow in relation to gaming.

According to that approach, the diversification of the economy will continue to be very much related to the gaming industry…

Business Daily | 9

March 30, 2015

Macau The government has invested in the MICE (Meetings, Incentives, Conferences, Exhibitions) sector as an alternative to gaming. Do you believe this investment has been successful? Is this sector an example of how to diversify the economy?

This sector generates revenues in one year that equals the revenues of three hours of the gaming industry. This tells of the long path ahead for this sector before it can be considered important for the External Merchandise. It is known that more than 50 per cent of the revenue generated by the MICE industry comes directly from government subsidies. According to the data available, this sector alone is still generating deficits. Having this in mind, we cannot expect MICE to lead the diversification of the economy. Maybe in 20 years it may reach the point where it will be profitable without government subsidies.

One of the problems for any company operating in the region is the lack of human resources.

The opening of the new wave of casinos in Cotai is likely to aggravate this problem. How can this be solved?

The lack of solutions for the workforce of Macau is the weakest point of the Macau Government.

The government is afraid that by importing labour it may end up affecting the social stability of the territory, as a result of foreigners taking jobs from locals. This does not make any sense because at the moment the level of unemployment among locals is non-existent.

Another inefficiency in economic

terms is the fact that there are some professions reserved only for Macau residents. The gaming industry is supposed to grow massively after this adjustment period and it will require an extra 50,000 to 70,000 employees.

The gaming concessionaires have invested almost double what they invested before the second wave of investment in Cotai, and in order to operate these resorts they will need to hire non-local workers, including for the dealer positions. Without enough workforce it makes no sense to have such investments.

The gaming industry dropped 2.6 per cent last year. This year, it’s predicted to shrink around 30 per cent. What do you expect for this adjustment period?

It is a brutal adjustment period. In February 2014 gaming revenues generated around MOP38 billion and during the last month it was roughly 50 per cent less, generating only MOP19 billion. We cannot clearly see what’s going to happen and if the sector will recover during the second half of the year. If gaming revenues continue to decline at this pace and if the doubledigit reduction persists during the second half of the year, there will be a double-digit contraction in the Macau economy of around 11 or 12 per cent.

As has always happened since the handover, there has been the invisible hand of the Mainland China government [at work] in the Macau economy. For the most part, this hand has been acting in favour of Macau. Now, I believe the central government has reached a point where they concluded that the

Macau Government was not able to slow the gaming sector so they’ve started to do it.

But why would the Mainland Government want to slow down the gaming sector of Macau?

The gaming sector has been growing at a pace of 30 to 40 per cent. This is not sustainable for the economy of Macau, and cannot meet the needs of the industry.

Such growth would lead the gaming industry to overpower all the other sectors in Macau. I believe the government will receive instructions from the central government that the gaming industry cannot continue to grow at a double digit pace of 30 to 40 per cent as before.

Maybe after the slowdown the gaming industry will continue to grow at a double-digit rate but not as before.

What effects can we expect from the economic contraction?

In relation to the economy, it will be a massive slowdown. In relation to the gaming industry, it can be more complicated. It may create a problem for the government. Macau is losing out to competition and it may lead the government to have to cut gaming taxes in order to ensure that the gaming investment will be completed. For the time being the gaming sector is profitable but the government has to consider the effects of the decline of revenues on the sector and prepare for it.

The gaming operators invested heavily in Cotai and they have grand expectations. How do you expect the industry to react to the slowdown?

I believe they will delay their investments. Declining revenues make it more difficult for the industry to finance their resorts.

The investments set to open in 2020 are to be delayed to 2025, for example.

This government will have to deal with the renewal of the gaming licences. The process is starting this year. Is there space in the market for another operator?

We’re talking about massive investments from the concessionaires for a region where no land is available. This conversation is part of local lobbies that want to have their own licences.

I don’t think the government will add another licence.

Do you think the completion of the Light Rapid Transit before the opening of the new projects is essential to Macau?

Yes. The Light Rapid Transit could solve the transportation problems to casinos for workers and visitors, by not using the same transport as the people living in Macau. It could alleviated the transport system.

The faster solution for this problem would have been to have built it [all] above ground. It would not have created divergences among the population and the government would not have needed to have had so many public consultations on the LRT routes. Then you also have the problem that when the works are supposed to be started the contractors are delaying the process because there’s no project manager. In order to save money, the government is spending 10 times more.

10 | Business Daily

March 30, 2015

Macau

China may further open securities market to SARs investors China’s securities regulator said it will come up with policies to further open its securities industry as it continues developing the country’s capital markets

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he China Securities Regulatory Commission is now focusing on implementing previously announced measures allowing financial institutions from Hong Kong and Macau to enter China’s securities industry, the regulator said Friday on its microblog.

The Chinese government previously pledged to let financial institutions from Hong Kong and Macau set up securities joint ventures in Shanghai and Shenzhen, plus one in Guangdong province outside of Shenzhen. They can own as much as 51 per cent of the joint ventures, with no more than one in each location, according to the microblog statement.

Loosening restrictions will allow overseas investors to compete more effectively in Asia’s largest equities market.

Greater foreign participation may also help China develop its securities industry, more than a decade after Goldman Sachs Group Inc. set up a joint venture in Beijing.

Possible Changes China has been considering sweeping changes to its securities industry that would allow foreign banks to control local joint ventures and broaden their offerings beyond stock and bond underwriting, people with knowledge of the matter said earlier this month. Overseas firms could ultimately be

H

allowed to take full control of joint ventures, the people said.

China stepped up the opening of its capital markets after it was admitted to the World Trade Organization in December 2001. The government encouraged local brokerages to find overseas partners to help strengthen the industry.

Since then, China’s securities firms have surged in value as the country’s economic boom pushed stock markets higher and trading volumes soared. Foreign-backed joint ventures, restricted primarily to handling share sales and bond underwriting and trading, didn’t benefit to the same extent.

Bloomberg

Chasing Chinese tourists, Samsonite launches multi-brand airport shops

Chow Sang Sang profits dip as sales decline in SARs ong Kong-listed jewellery retailer Chow Sang Sang Holdings International Ltd. saw a decline in same-store sales growth in its key markets in Hong Kong and Macau last year, following which the company does not plan any new stores in the two cities.

Chow Sang Sang’s same-store sales growth in Hong Kong and Macau plunged 23 per cent last year, while turnover from retail jewellery retreated 20 per cent with higher-priced jewellery bearing the brunt, the company said in its annual results filing.

Chow Sang Sang, which also runs wholesale precious metals as well as securities and futures broking, saw its overall revenue derived from Hong Kong and Macau plummet nearly 31 per cent year-on-year to HK$12.2 billion (US$1.57 billion) in 2014.

The jewellery retailer noted a more adverse retail climate in Macau as both the retail and gaming industry have suffered headwinds caused by the central government’s tightened

Loosening restrictions will allow overseas investors to compete more effectively in Asia’s largest equities market

grip on fund flow and visa restrictions.

The company, which also noted a 21 per cent in rental hikes last year, says it does not contemplate opening new stores in either Hong Kong or Macau.

C how S a n g S a n g ’ s p r o fi t attributable to equity holders declined 11 per cent to HK$1.08 billion for last year, while turnover derived from the core business of retail jewellery dropped 15 per cent year-on-year to HK$16.9 billion.

The company said a short but marked dip in gold price in November stimulated demand but the effect was not sustained, noting that its business was hurt by less spending on jewellery products, especially on high-value items.

Chow Sang Sang said it will resolve to concentrate more resources on developing ‘affordable luxury’ or daily-wear products. The retailer will also look into enhancing the synergy between online stores and physical outlets.

S.L.

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amsonite International , the world’s biggest luggage maker, attributed its record China sales last year to the company’s wide range of brands aimed at travellers with varying budgets and tastes.

Its next target: tourists at airports.

The Hong Kong-listed company reported US$227 million in China sales last year after opening hundreds of stores in not just major urban centres on the prosperous coast, but up-and-coming cities in the interior such as Chengdu, which has non-stop flights to destinations as far away as London and San Francisco. China accounted for a quarter of sales in Asia, which was Samsonite’s biggest regional market.

Even with a slowing economy and an austerity campaign by the government, China has a stillgrowing middle class, which will help double the number of outbound tourists - who will all need luggage - to 200 million by the end of this decade, according to an estimate by

Hong Kong-based brokerage CLSA. Apart from its flagship Samonite brand, the company also sells Lipault travel bags, high-end Hartmann suitcases, American Tourister luggage, and High Sierra and Gregory backpacks. With new openings under the J.S. Trunk & Co name, and its acquisition of Rolling Luggage in February, Samsonite now operates multi-brand stores in airports. In Greater China, Samsonite currently has a total of six multi-brand airport retail shops - one in Hangzhou and five in Hong Kong and Macau.

“Airport retail almost becomes advertising,” Chief Financial Officer Kyle Gendreau said in a recent media briefing in Hong Kong. Samsonite’s ownership of the shops lets the company choose which brands to emphasise in displays. Samsonite could, for example, highlight American Tourister to boost its appeal.

Reuters

Business Daily | 11

March 30, 2015

Greater China China urge funding of new Silk Road to Europe China will encourage local companies to issue bonds overseas to fund projects to create a modern Silk Road, a plan to boost connectivity across Asia for which it has created a US$40 billion fund, according to a framework agreement released on Saturday by the official Xinhua news agency. The so-called “One belt, One road” initiative to link Asia to Europe and Africa is the latest step by China to extend its global influence, even as it works to sign up more countries to its Asian Infrastructure Investment Bank (AIIB).

Greece to sell Piraeus Port stake in weeks The Greek government will sell its majority stake in the port of Piraeus within weeks, the country’s deputy prime minister told China’s official Xinhua news agency, a flip-flop from the leftist government as it seeks funds from its creditors.

The Syriza government of Alexis Tsipras took power in January on promises to end painful austerity, saying it would halt a string of privatisations. China’s Cosco Group was among five preferred bidders shortlisted under a privatisation scheme agreed by the previous conservative-led government as part of a 240 billion euro (US$261 billion) bailout programme.

Africa-China Young Leaders Forum opens The third Africa-China Young Leaders Forum opened Saturday in northern Tanzania’s tourist hub of Arusha, attracting over 400 delegates from 40 African nations and China to promote youth exchange and cooperation. Addressing the opening ceremony, Wang Jiarui, vice chairman of the National Committee of the Chinese People’s Political Consultative Conference, praised the achievement that China and African countries has made in terms of promoting exchanges and cooperation among young people. Wang announced that China will invite 1,000 young African political figures to visit China and attend training classes in the next three years.

More maritime cooperation with ASEAN China hopes all-round maritime cooperation with the ASEAN will become a model for building the 21st Century Maritime Silk Road, Chines State Councilor Yang Jiechi said on Saturday. Yang made the remark at a ceremony launching the maritime cooperation year between China and the ASEAN, held on the side-lines of the 2015 Boao Forum for Asia. Yang said China is willing to work with all countries involved to establish a win-win maritime partnership and strive for early progress.

Two graft-involved fugitives repatriated from Laos A former official and a businessman, suspected of bribery, were taken back to China Saturday after about three months of exile in Laos, the Ministry of Public Security announced. Pang Shunxi, a former tax official of Tianjin Municipality, was suspected of accepting bribes while An Huimin, former general manager of a trade company in Tianjin, was suspected of bribing, said a ministry statement. They fled to Laos after prosecutors started investigating them in December last year.

Central bank governor calls for vigilance on deflation Zhou said China could undermine structural reforms if it adopts an excessively loose monetary policy policy, while pledging to relax capital controls to help make the yuan currency fully convertible.

Zhou also said yesterday that China hoped to work on streamlining regulations around foreign exchange this year and that through the adoption of new rules China would eventually be able to achieve capital account convertibility.

Slowing commodity prices China’s central bank governor Zhou Xiaochuan

C

hina’s central bank governor Zhou Xiaochuan warned yesterday that the country needs to be vigilant for signs of deflation and said policymakers were closely watching slowing global economic growth and declining commodity prices.

Zhou’s comments are likely to add to concerns that China is in danger of slipping into deflation and underline increasing nervousness among policymakers as the economy continues to lose momentum despite a raft of stimulus measures.

Zhou said that the speed with which inflation was slowing was a “little too quick”, though this was part of China’s ongoing market readjustment and reforms.

Beijing is determined to keep the world’s second-largest economy from taking the same path of recession and deflation that has blighted its neighbour Japan for the past 20 years.

The central bank’s newspaper

warned last month that China is dangerously close to slipping into deflation.

The People’s Bank of China (PBOC) has cut interest rates twice since November and taken other steps to support growth, but economists believe it will be forced to take more aggressive measures in coming months if prices and the economy weaken further.

No timetable on liberalisation Zhou also said China had a “clear direction” in terms of interest rate liberalization - a long-term goal although he added it was difficult to put a clear timetable on the move. He pointed to comments made last year when he said the country’s deposit rates were likely to liberalised in one to two years.

Last week, Zhou said China could undermine structural reforms if it adopts an excessively loose monetary

China is also “cautious” about the wider global slowdown, falling inflation and tumbling commodity prices, Zhou said. The price of oil, for example, is down by over 50 percent since mid 2014, aggravating a broader commodity price rout which has pushed down inflation in all the major industrial economies.

China is particularly susceptible as the world’s largest net importer of petroleum and iron ore.

China’s annual consumer inflation quickened to 1.4 percent in February from a 5-year low of 0.8 percent the previous month.

However, Qian Yingyi, a member of the central bank’s monetary policy committee, told Reuters earlier this month that the bounce could be a one-off blip as a result of the Lunar New Year holiday.

Producer prices declined 4.8 percent in February, the sharpest drop since October 2009 and extending a long-running factory deflation cycle to nearly three years.

Reuters

Land supply restricted amid property downturn Decisions on land supply plans by municipal or county-level governments will be supervised by provincial governments

C

hinese land and housing authorities announced measures to regulate land supply for residential buildings over concerns of a glut in home supply.

In cities or counties with excessive home inventories, local governments should “significantly” reduce or halt land supply, according to measures jointly rolled out by the Ministry of Land and Resources and the Ministry of Housing and Urban-Rural Development.

Meanwhile, in cities where there are not enough homes to meet demand, land supply should be increased based on market principles, the measures said.

They did not specify a unified standard to gauge oversupply, instead they are expected to be established by the regions themselves as they are required by the ministries to draw up their land supply plans for 2015.

Decisions on land supply plans by municipal or county-level governments will be guided and supervised by

provincial governments; they should be based on home surveys, demand projections, and the scale of homes available for sales while taking into consideration resources, environment and population, according to the new regulations.

Local governments have relied heavily on land sales for fiscal income, a phenomenon which analysts say entails risks to the economy once the property market cools. It is also unsustainable, given lands are limited.

A Deutsche Bank report in January estimated that land sales account for 35 percent of total local government revenues in China.

The measures are in line with the cabinet’s guidelines on differentiated control of the property market among regions, a statement released on Friday by the two ministries said.

“The measures aim to reasonably optimize the scale and structure of land supply... and promote the property sector’s stable and healthy development,” the statement said.

According to the new regulations, in regions where there is oversupply, local land departments may transform undeveloped residential lands for other purposes, such as for venues of state-championed industries, elder care facilities as well as cultural and sports facilities.

In order to meet the living demands of middle and low-income groups, local governments may also transform commercial residential homes into relocation homes or governmentsponsored homes for rentals.

China’s property sector took a downturn in 2014 after boom years that saw home prices rocket to levels out of reach for common wage earners.

The cooling trend has continued, with both sales and prices falling, and investment slowing.

According to an official survey of 70 cities, new home prices dipped in 66 of the cities on a monthly basis in February. On a year-on-year basis, the prices dipped in 69 of the cities.

Xinhua

12 | Business Daily

March 30, 2015

Greater China

Xi reaches out to Asian nations with investment opportunities Macau’s Chief Executive attends sessions

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resident Xi Jinping reached out to China’s neighbours, saying his country will offer other Asian nations trade and investment opportunities as it seeks support for two regional initiatives that it’s championing.

The US$40 billion Silk Road Economic Belt has attracted interest from more than 60 countries and international organizations, and the founding of the Asian Infrastructure Investment Bank is proceeding smoothly, Xi said in a speech at the Boao Forum for Asia on China’s southern Hainan Island.

Xi’s address highlighted the two initiatives China has presented in recent months as it seeks new ways to sustain growth and expand its economic influence globally. He pledged to boost coordination in Asia and said bigger countries must take on more responsibility in world affairs.

“China’s economy shouldn’t be viewed only by its growth rate,” Xi said. “China’s economy entering the new normal will continue to provide countries including Asian nations more markets, growth, investment

and cooperation opportunities.”

The “new normal” phrase adopted

by Xi and other Chinese leaders refers to their push for growth driven by domestic consumption rather than exports and infrastructure. The government targets growth of about 7 percent this year, down from last year’s 7.4 percent.

Bond sales The Chinese government will support yuan-denominated bond sales in China by countries, companies and financial institutions along the Silk Road belt, the official Xinhua News Agency reported, citing government agencies.

China will also urge domestic financial institutions and companies to sell bonds overseas and spend the proceeds in countries in the region, as well as help expand currency swaps and settlements between these nations, Xinhua said.

China plans to improve its investment environment and welcomes all countries to join the Silk Road initiative, Xi told the audience, which included business leaders and

government officials from Malaysia, Australia and other nations.

Xi also said that China needs a peaceful environment -both domestically and overseas- to prosper.

“Any instability or war wouldn’t be in accord with the basic interests of Chinese people,” Xi said. “China will unshakeably stick to independent and autonomous peaceful diplomatic policies, and stick to the peaceful development road.”

‘Good thing’ Xi spoke shortly after the finance ministry issued a statement saying that the Asian Infrastructure Investment Bank broadened its founding members, including the U.K., Switzerland, Netherlands, South Korea, Denmark, India and the Philippines. So far, the U.S. and Japan are the only Group of Seven holdouts to the initiative.

Australia decided to sign a Memorandum of Understanding on the Asian Infrastructure Investment Bank (AIIB), which would allow them to become a founding member

of the bank, Prime Minister Tony Abbott said yesterday.

In a joint statement with Foreign Minister Julie Bishop and Treasurer Joe Hockey, Abbott said the MOU will enable Australia “ to participate as a prospective founding member in the negotiation of setting up the bank.”

Russian President Vladimir Putin approved his nation joining the AIIB, First Deputy Prime Minister Igor Shuvalov said in a speech at Boao following Xi’s address.

“Basically, it’s a good thing” to spend more money on the infrastructure to improve lives in different parts of the world, Stephen Schwarzman, chairman of Blackstone Group LP, said in an interview with Bloomberg Television on Saturday at the forum. “That’s one reason why I think European and other Asian countries have responded.”

“Facing the fast-changing regional and international situation, we must see the whole picture, follow the trends of our times and build a regional order that is more beneficial to Asia and the world,” Xi said.

China to reduce excess steel capacity China will cut the number of steel enterprises to around 300 from more than 500

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hina will aim to cut as much as 80 million tonnes of excess steel capacity in the next three years to tackle a massive supply glut that has plunged much of the sector into crisis, a government official said on Saturday.

Speaking at an industry forum, Luo Tiejun of the raw materials department of the Ministry of Industry and Information Technology (MIIT) said China would publish a new 2015-2017 action plan to restructure its bloated steel sector before June this year.

According to the draft plan, China will cut the number of steel enterprises to “around 300”, down from more than 500 currently, and would also strive to achieve zero energy growth from the sector and a cut in emissions

The main task is still to strengthen the market position of enterprises and improve the overall competitiveness of the sector

by 2017, Luo said.

China has long struggled to resolve a capacity glut now amounting to around 300 million tonnes of annual

production, with growthobsessed local governments encouraging local enterprises to expand as quickly as possible.

Luo Tiejun, China’s Ministry of Industry and Information Technology

Bloomberg News and Xinhua

Officials now say the industry is facing its worst crisis yet, not only as a result of slowing economic growth and a state vow to tackle pollution, but also amid long-term changes in steel consumption patterns.

Though prices of the key raw material iron ore have halved over the past year, Chinese mills still suffered losses in January and February, and “economic slowdown pressures” have got worse since 2014, said Liu Zhenjiang, vice-chairman of the China Iron and Steel Association.

Zhao Xizi, chairman of the All-China Chamber of Commerce for Small and Medium-Sized Metallurgical Enterprises, said the woes facing the sector were only just beginning.

He said steel intensity - or the amount used per 10,000 yuan of GDP growth - had already fallen from 174 kg in 2007 to 100 kg in 2014, and would drop further to 70 kg in the next few years as the structure of China’s economy changes and steel production finally peaks.

Reuters

editorial council Paulo A. Azevedo, José I. Duarte, Mandy Kuok Founder & Publisher Paulo A. Azevedo | pazevedo@macaubusinessdaily.com Newsdesk João Santos Filipe, Luis Gonçalves, Michael Armstrong, Stephanie Lai, Óscar Guijarro, Kam Leong, Joanne Kuai GROUP SENIOR ANALYST José I. Duarte Brands & Trends Raquel Dias Creative Director José Manuel Cardoso Designer Francisco Cordeiro WEB & IT Janne Louhikari Contributors James Chu, João Francisco Pinto, José Carlos Matias, Larry So, Pedro Cortés, Ricardo Siu, Rose N. Lai, Zen Udani Photography Carmo Correia Assistant to the publisher Laurentina da Silva | ltinas@macaubusinessdaily.com office manager Elsa Vong | elsav@macaubusinessdaily.com Agencies Bloomberg, Reuters, AFP, Xinhua, Lusa, Project Syndicate Printed in Macau by Welfare Ltd.

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Business Daily | 13

March 30, 2015

Asia

Vietnam rice boom heaping pressure on farmers The amount of land under cultivation in the Mekong Delta has also expanded and quotas are in place to prevent farmers from switching to other crops Cat Barton

S.Korean retail sales up Sales at South Korea’s top department stores rose at the fastest annual pace in six months in February but growth was slower than estimated earlier, revised government data showed yesterday.

Combined sales last month at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae Co grew by a revised 6.6 percent from a year earlier, the trade and industry ministry data showed. That was the strongest annual growth since August last year but it was slower than the 7.1 percent gain estimated by the finance ministry on March 10.

Indian court says no evidence of coal cartel An Indian court on Friday said there was “absolutely no evidence” of collusion in the low winning bids for three of the 33 coal mines put up for auction by the government over the past two months. The government earlier rejected four winning bids -- three from Jindal Steel and Power Ltd and one from aluminium maker BALCO -- after examining nine blocks whose unexpectedly low bids prompted the designation “outliers”. The court was hearing the case after Jindal Steel and BALCO, majority owned by mining major Vedanta Group Plc, appealed against the government’s decision.

Philippine Airlines purchases two more jets

The Philippines’ struggling flag carrier said Sunday it has purchased an additional two Airbus jets as part of its re-fleeting program. The two Airbus A321 NEO planes bring to 40 the total number of deliveries that Philippine Airlines will receive from Airbus up to 2024, the carrier said in a statement.

“The A321 NEOs will enable PAL to continue to grow its current single-aisle fleet and spread out its aircraft delivery stream in line with market growth,” according to the statement. The jets will be used for domestic routes, company spokeswoman Cielo Villauna told AFP.

Vietnam’s agro exports to decrease Vietnam’s agro-forestry-forestry export revenue is likely to decrease by 13.2 percent year-on-year to hit US$6.13 billion in the first quarter (Q1) of 2015, according to Vietnam’s Ministry of Agriculture and Rural Development (MARD) on Friday. Specifically, export value of key agricultural items is forecast to hit 2.92 billion dollars, down 15.1 percent year-on- year. Those of seafood and forestry products are expected to stand at 1.27 billion dollars and 1.5 billion dollars, posting a year-on- year decrease of 20.6 percent and 0.4 percent, respectively.

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ice farmer Nguyen Hien Thien is so busy growing his crops that he has never even visited Can Tho, a town only a few miles from his farm in the southern Mekong Delta.

“When I was a child, we grew one crop of rice per year -- now it’s three.

It’s a lot of work,” 60-year-old Thien, who has been farming since he was a child, told AFP on the edge of his small paddy field.

Experts say Vietnam’s drive to become one of the world’s leading rice exporters is pushing farmers in the fertile delta region to the brink, with mounting costs to the environment.

The communist country is already the world’s second largest exporter of the staple grain. But intensive rice cultivation, particularly the shift to producing three crops per year, is taking its toll on farmers and the ecosystem.

“Politicians want to be the world’s number one or two rice exporter.

As a scientist, I want to see more being done to protect farmers and the environment,” said Vietnamese rice expert Vo Tong Xuan.

A major famine in 1945 and food shortages in the post-war years led to the government adopting a “rice

This is really ground zero for some of the most difficult adaptation, planning challenges that any country in the world has Rachel Kyte, World Bank Group, vice president

first” policy.

This now generates far more of the crop than needed to feed Vietnam’s 90 million population and has catalysed a thriving export industry.

Rice yields have nearly quadrupled since the 1970s, official figures show, thanks to high-yield strains and the construction of a network of dykes that today allow farmers to grow up to three crops per year.

But experts are questioning who really benefits.

According to Xuan, farmers don’t reap the rewards of the three crop system -- the rice is low quality and they spend more on pesticides and fertilisers, which become less effective year by year.

Falling quality He argues the delta would be better off if farmers cultivated a more diverse range of crops, from coconuts to prawns, with just the most suitable land used to grow rice.

The country should consider abandoning the third crop and focus on improving quality and branding to sell Vietnamese rice at higher prices, he said.

Currently, the bulk of Vietnam’s rice is exported at cut-price costs on government-to-government contracts through large state-owned enterprises (SOEs) like the Southern Food Corporation, known as Vinafood 2.

“Over the last five years, the trend is towards lower-quality rice,” admitted Le Huu Trang, deputy office manager at the firm.

Some argue that such SOEs have a vested interest in maintaining the status quo as they earn lucrative kickbacks from the huge contracts.

But even as salt water intrusion, drought and flooding increase in the delta -- to say nothing of agricultural chemical pollution -- it is also hard to convince farmers to change.

“The prevailing mind-set is to grow three crops... we have to explain two crops is better,” said Nguyen Tuan Hiep from the Co Do Agriculture company.

Over the last 20 years, Co Do

-- which is state-run but a flagship model of how the industry could evolve -- has identified the best ricegrowing land in the delta and helped farmers expand their farms.

They now work with 2,500 families on 5,900 hectares (14,600 acres) of land, enough for each family to make a living -- typically the average rice farm in the delta spans less than one hectare.

The firm invests heavily in high-quality seeds and improving irrigation, while also advising farmers on the best chemicals to use.

“Two crops is more sustainable long term -- the soil is not degraded, the environment isn’t polluted, and value of the rice increases,” Hiep said.

‘Ground zero’ Climate change is another factor threatening the delta, according to the World Bank Group’s vice president and special envoy for climate change Rachel Kyte.

“This is really ground zero for some of the most difficult adaptation, planning challenges that any country in the world has,” she said.

Ultimately Vietnam has tough choices to make, including whether to help people transition from a ricebased economy to aquaculture (fish or shellfish farming) or other crops, Kyte added.

The environmental costs of maintaining Vietnam’s current level of rice production are also rising.

The system of dykes, which blocks flood water, are preventing soil nutrients from flowing freely and over time “soil fertility will fade”, said Tran Ngoc Thac, deputy director of Vietnam’s Rice Research Institute.

Scientists there are busy trying to breed new strains of rice that require fewer fertilisers and can survive in extreme weather.

“If farmers don’t change, if we can’t find a suitable new rice strain, pollution will continue and incomes will drop,” Thac said, adding these measures were essential to save the delta.

AFP

14 | Business Daily

March 30, 2015

International Italy to set 0.7 pct GDP growth forecast Italy will probably nudge its forecast for economic growth this year up to 0.7 percent from 0.6 percent when it issues new economic and public finance projections next month, a senior minister said on Saturday. Maria Elena Boschi, minister for constitutional reforms, said at a Milan conference organised by retail lobby Confcommercio that the government would present its Economic and Financial Document (DEF) by April 10 with a “prudent” 2015 growth forecast which “will probably be 0.7 percent”.

The Italian economy has shrunk for the last three years.

Russia’s rich forego some luxuries but still back Putin Putin appealed again to leading businessmen to bring their money from offshore accounts back to Russia before, he suggested Elizabeth Piper

Creditors offer Puerto Rico refinancing Creditors of Puerto Rico’s debt-laden power authority have offered it US$2 billion in new financing, including US$1.2 billion to fund a new natural gas operation, in exchange for assurances that it would repay its debt, two people close to the matter told Reuters on Saturday.

While it remains to be seen if the Puerto Rico Electric Power Authority will accept the proposal, such a financing could stave off a messy default that would reverberate around the U.S. municipal bond market, and allow the utility to modernize its business.

Greek PM seeks no rift with Europe Greek Prime Minister Alexis Tsipras said on Saturday that he sought no rift with Europe after his cash-strapped country submitted a list of reforms to its lenders in a bid to secure much-needed funds. Tsipras’s leftist government agreed an extension to its 240-million euro bailout funding in February, albeit with aid frozen, and now must agree on a set of reforms which it sent to its EU-IMF creditors on Friday in order to stave off bankruptcy. The austerity-weary nation will run out of money

by April 20.

Dufry to buy Italy’s World Duty Free Switzerland’s Dufry has agreed to buy a majority stake in World Duty Free in a deal which values the Italian firm at 3.6 billion euros (US$3.8 billion) and will make the combined group the world’s biggest travel retailer. It said proceeds from the sale would total 1.3 billion euros, valuing the whole group at just under 3.6 billion euros after taking account of debt, which stood at 970 million euros at the end of last year. The deal is the second high-profile foreign takeover of an Italian company in less than a week.

Britain’s tax havens to central register firms Britain’s government has told two of its offshore financial tax havens to set out timetables for implementing a central register of companies revealing corporate ownership, in a bid to help combat tax evasion. Prime Minister David Cameron proposed plans for a public register of company ownership in 2013, during a G8 summit in Northern Ireland, which was met with opposition by the overseas territories who said it would damage the UK’s interests.

A Treasury spokeswoman confirmed that letters had been sent to the British Virgin Islands and the Cayman Islands on Friday.

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ussian model Alisa Krylova cancelled her order for the latest Mercedes, spent New Year in Moscow rather than skiing in the Alps and now employs Russian staff rather than foreigners.

The former Mrs Russia and Mrs Globe beauty pageant winner is among Russia’s super rich but even she and many of her wealthy friends are feeling the pinch from the economic crisis.

Driven into “a kind of hibernation”, they are steering clear of celebrity parties and trimming spending to make up some of the millions lost to a weak rouble and a falling stock market.

But the enforced modesty has not yet driven the super wealthy out of Russia or against President Vladimir Putin, who has fanned patriotism during the Ukraine crisis and appealed to businessmen to bring their money home to bolster Russia’s position in the worst standoff with the West since the Cold War. Perched on a golden sofa in the living room of her newly built apartment in Moscow, Krylova, 32, recoils at her compatriots who flocked to buy televisions, refrigerators and buckwheat - a popular staple - when the rouble plunged in December and shops had yet to change their prices to catch up.

“And what about me? I am calm in dealing with the crisis, nothing really terrible has happened. Yes, of course, we didn’t fly away on holiday this year because I did not see the point in paying three times over the odds,” said Krylova, whose flawless beauty has put her on the covers of numerous fashion magazines.

“So we decided to holiday in Moscow and St. Petersburg and went to museums, theatres, everywhere, and we had a wonderful time. It was great to go to Red Square to see the Christmas tree and I think it was just as good as skiing in Austria or France.”

It’s an attitude Putin is counting on.

Since coming to power in 2000, the former KGB spy has tamed the country’s powerful businessmen, or oligarchs, who in the 1990s used their control over the Russian economy to

influence politics and his predecessor, Boris Yeltsin.

After bringing some of what he calls Russia’s ‘national champions’ in the energy sector back under state control, Putin made a deal with private owners of big business - be loyal and stay out of politics and you can keep your assets.

It is a bargain which has largely held, even with the rouble down 40 percent against the U.S. dollar since last summer, and the economy weakened by a fall in global oil prices and Western economic sanctions over Ukraine.

Loyalty Konstantin Kostin, a former aide to Putin who now heads the Civil Society Development Foundation, said some in Russia’s business elite were without doubt suffering from the downturn.

“Someone may be discontented, but I don’t think that it’s that widespread,” he said.

“I think that if we are talking about their political affiliations, then they are loyal.”

Earlier this month, Putin appealed again to leading businessmen to bring their money from offshore accounts back to Russia before, he suggested, the West closed off flows in possible further sanctions over Ukraine.

“So he said clearly - you’ve got enough for a good standard of living so please bring everything back to Russia so we can lift up our country,” said Krylova.

She says she is married to a “successful businessman” while declining to identify him, and that all of her assets are in Russia, as are most of her husband’s.

A self-declared patriot who wants to “pass something on” to the next generation, Krylova still likes to pop over to France and other west European countries for long weekends to indulge herself in French and Italian cheeses, imports of which have been banned by Russia in retaliation to the sanctions.

But mostly, Russia’s wealthy are staying home, while making sure they have a firm plan B in place.

KEY POINTS Russian economy hit by sanctions, low oil price Putin has clipped wings of business leaders President wants rich to keep money in Russia

Luxury magazine director Alexei Koval said some businessmen had worked out an “evacuation plan” in case they fell out of favour.

“I think that the majority of businessmen who in some way may have something to fear have, a long time ago, prepared spare airfields and put in place plans for a quick emigration or, God forbid, evacuation of their family,” said Koval, operating director at CITYMAGAZINE, which offers lifestyle and investment tips to “successful people” in Russia’s main cities.

In the meantime, some luxury companies, while counting the cost of Russia heading into recession, are also counting on Russia’s wealthy staying put for a while.

Upmarket jeweller Bulgari said it would open its first own-brand shop in Russia in October, while U.S. car producer General Motors Co says it is shutting its Russian factory to focus on premium cars - a sector which has largely weathered the crisis.

But they will have to contend with an elite that has become “more modest” in its spending habits.

“No one wants to show off and everyone is waiting. When there was the panic, crisis, speculation, the middle class ran to get its stashed money and started to buy everything,” Krylova said. “Those who are higher than the middle class and even higher, they are kind of hibernating.”

Reuters

Business Daily | 15

March 30, 2015

Opinion

Are equities overvalued? wires Business

Leading reports from Asia’s best business newspapers

Michael Spence

Nobel laureate in economics, is Professor of Economics at New York University’s Stern School of Business and Senior Fellow at the Hoover Institution

THE KOREA HERALD South Korea’s No. 2 tech giant, LG Electronics Inc., said yesterday it will take “strong” action against sales of counterfeit G3 smartphones in China by joining forces with Beijing authorities. LG said the move came as a number of smartphone retailers in China are selling the fake G3 smartphones at a price tag of less than US$100 on major websites, including Taobao and Baidu, while claiming the phones are genuine products with official certificates. The long-term evolution version of the product was initially released at a price of 899,800 won (US$812.97) in South Korea.

PHILSTAR The (Philippine) Department of Energy (DOE) has created an Alternative Dispute Resolution (ADR) Committee to mediate, settle and resolve in an amicable, conciliatory and expeditious manner disputes and conflicts among parties over the issues of contracts by the department for various projects. In Department Order 2015-03-0002 signed by Energy Secretary Carlos Jericho Petilla, the DOE mandated the creation of the committee which would develop and recommend measures aimed at settling disputes among parties that may arise over DOE-approved contracts. Furthermore, the order tasked the committee to review periodically the ADR processes in their respective area of jurisdiction.

THE TIMES OF INDIA With an aim to reduce risk in the banking sector, RBI has proposed to limit exposure of a bank to a business group to 25 per cent of its capital, down from the existing level of 55 per cent. “The sum of all the exposure values of a bank to a single counterpart or to a group of connected counterparties must not be higher than 25 per cent of the bank’s available eligible capital base at all times,” a draft paper released by RBI said. The proposed ‘Large Exposure’ (LE) framework will be fully applicable from January 1.

BANGKOK POST A plan to replace martial law with sweeping new powers for Prime Minister Prayut Chan-o-cha has prompted fears it will promote human rights abuses. Critics of the plan are concerned that Gen Prayut will use a new order issued under Section 44 of the interim charter to give himself absolute power over executive, legislative and judicial decisions. Yodpol Thepsitthar, a law lecturer at Naresuan University, described Section 44 as a “dictatorial law” and said it would be no better than leaving martial law in place.

S

ince the global economic crisis, sharp divergences in economic performance have contributed to considerable stock-market volatility. Now, equity prices are reaching relatively high levels by conventional measures – and investors are starting to get nervous.

The question is whether stock valuations are excessive relative to future earnings potential.

The answer depends on two key variables: the discount rate and future earnings growth. A lower discount rate and/or a higher rate of expected earnings growth would justify higher equity valuations.

The S&P’s price-to-earnings (P/E) ratio for the trailing 12 months is close to 20, compared to a long-run mean of 15.53 and a median of 14.57.

The Shiller P/E ratio – based on average real (inflation-adjusted) earnings from the last ten years – is at 27.08, with a mean and median of 16.59 and 15.96, respectively. And, in February, the forward 12-month earnings P/E ratio, which uses managers’ future earnings guidance, reached an 11-year high of 17.1, with the five- and ten-year averages standing at about 14 and the 15-year average at 16.

The stock market’s recent performance often is attributed to the unconventional monetary policies that many central banks have been pursuing.

These policies, by design, lowered the return on sovereign bonds, forcing investors to seek yield in markets for higher-risk assets like equities, lower-rated bonds, and foreign securities.

According to the standard formulation, stock prices tend to revert toward the present value of estimated future earnings (including growth in those earnings), discounted at the so-called “risk-free rate,” augmented by an equity risk premium. More precisely, the forward earnings yield – that is,

The appreciation of the dollar exacerbates the situation for US markets, because it creates headwinds for exporters and causes companies’ foreign earnings, reported in dollars, to decline

the inverse of the P/E ratio – is equal to the risk-free rate plus the equity premium, minus the growth rate of earnings. (Of course, markets take detours along the way, driven by, say, irrational exuberance, temporary declines in the impact of value investors, or mistimed contrarian trades.)

Monetary policy may have bolstered stock prices in two ways, either lowering the discount rate by compressing the equity risk premium, or simply reducing risk-free rates for long enough to raise the present value of stocks. In either case, equity prices should level off at some point, allowing earnings to catch up, or even correct downward.

But the monetary-policy story, while plausible, is not ironclad.

Indeed, other factors may explain – or at least contribute to

– current stock-market trends.

A key factor is earnings growth.

In the long run, it is reasonable to expect that revenue growth would be broadly consistent with economic growth – and, as it stands, there is little acceleration on this front. Earnings can grow faster than revenues for a prolonged (though not indefinite) period, if companies cut costs or reduce investment – a trend that would, over time, lower depreciation charges. In theory, corporate-tax cuts could have the same effect.

Furthermore, the economy’s equilibrium conditions could change, so that aggregate earnings would capture a larger share of national income.

There is some evidence that this is now occurring in advanced economies, with the proliferation of labour-saving digital technologies and the globalization of supply chains suppressing income growth.

That said, some trends may be having the opposite effect on expectations for earnings growth. More than two-fifths of the S&P 500’s earnings come from external markets, some of which, like Europe and Japan, are barely growing, while others, like China, are slowing.

The appreciation of the dollar exacerbates the situation for US markets, because it creates headwinds for exporters and causes companies’ foreign earnings, reported in dollars, to decline. And a slowdown in productivity growth, together with excessive leverage and persistent public-sector underinvestment, may be undermining medium-term potential economic growth.

While expectations of faster earnings growth may well be contributing to elevated P/E levels, the current situation is complicated, to say the least.

What is certain is that expectations of high earnings growth would have a more durable positive effect on P/E levels than the suppression of the equity risk premium.

The other important factor affecting P/E is the risk-free rate. As monetary policy normalizes – a process that has already begun in the United States – the risk-free rate is expected to rise to a level that is consistent with stable 2% inflation, which, in turn, corresponds with a level of unemployment. What precisely that rate is, however, remains uncertain – and extremely difficult to determine, given that it is affected by virtually every aspect of the unfolding growth patterns.

Nonetheless, several features of current growth patterns stand out: excess productive capacity, persistent high leverage, declining labour content in goods-and-services production, and an increasingly unequal distribution of income both between labour and capital, and across labour-income segments, with their differential savings rates. Together, these patterns could lead to an extended period in which aggregate demand limits growth. With growth not constrained on the supply side, there would be little inflationary pressure, and the neutral interest rate that is consistent with non-inflationary full employment could simply be lower than it used to be for an extended period.

Where does this leave us? In my view, it is difficult to make a strong case for a significant sustained increase in earnings growth in this environment, meaning that growth alone would not justify current equity valuations. But the lower-discount-rate argument is more persuasive, and is consistent with underlying economic conditions and central banks’ mandates.

That said, in such a complex environment, investors can be expected to reach widely disparate conclusions, which will sustain – if not increase – market volatility.

Project Syndicate

16 | Business Daily

March 30, 2015

Closing Parliamentarians discuss UN’s role in modern world

U.S. jobs to add heat to Fed lift-off debate

Parliamentarians at a meeting of the Standing Committee on United Nations Affairs held yesterday in the context of the 132nd Assembly of the InterParliamentary Union (IPU), discussed the UN’s role in modern world to mark its 70th anniversary. The session, chaired by El Hassan Al Amin, Vice President of the committee, provided an overall assessment of the achievements and challenges the UN facing after 70 years since its creation as the world’s premier multilateral organization. Parliamentarians at the meeting focused their discussions on what the UN needs to do more effectively on implementation of its tasks and missions.

The state of the U.S. labour market in March will consume economists and investors in this week, adding to the seesaw debate over when the Federal Reserve will spring its first interest rate hike. Fed Chair Janet Yellen (pictured) made it clear that the U.S. central bank is likely to start raising borrowing costs later this year, adding that continued improvement of the labour market would be an important factor in deciding when to move. Labour data are likely to be the highlight of this week as the ADP National Employment Report may provide a foretaste on Friday.

Singapore’s citizens accompany its ‘Father’ at State Funeral Thousands of people, many of them dressed in white, lined roads yesterday in the central business district as heavy rain fell Sharon Chen and Andrea Tan

L

ee Kuan Yew was remembered as the founder of modern Singapore at a state funeral after a procession through the city’s streets that drew thousands of mourners despite heavy rain.

“We have all lost a father -- we grieve as one people, one nation,” Lee Hsien Loong, Lee’s son and the current prime minister, said yesterday in a eulogy. “Our shared sorrow has brought us together, and made us stronger and more resolute.”

Earlier, crowds lined an almost 10-mile stretch of central Singapore to bid farewell to the country’s first elected prime minister, as Lee’s body travelled in a gun carriage to the National University of Singapore for the funeral service. The procession was marked by a 21-gun salute, an air force aerial salute and a naval sail past.

“We come together not only to mourn. We come together also to rejoice in Mr. Lee Kuan Yew’s long and full life, and what he has achieved with us, his people in Singapore,”

Lee Hsien Loong said during the service attended by 2,200 people, including Indian Prime Minister Narendra Modi, Japanese Prime Minister Shinzo Abe and former U.S. President Bill Clinton.

“Perhaps it’s appropriate that for his state funeral, the heavens opened and cried for him,” Lee said.

Thousands of people, many of them dressed in white -traditionally a mourning colour in parts of Asia -- lined roads yesterday in the central business district as heavy rain fell. Huddling under umbrellas, many draped the red and white Singaporean flag over barricades. As Lee’s motorcade passed, some shouted “Lee Kuan Yew” and others cried, screamed and cheered.

‘Better place’ “The world is a better place for Lee Kuan Yew,” said Henry Kissinger, President Richard Nixon’s secretary of state.

“He taught us about the way Asians think about problems and he explained to us what

development meant in a practical sense.”

Kissinger and Clinton represented the U.S. at the funeral. Clinton earlier shook hands with Modi -- who was dressed in traditional attire -- and the two chatted on a balcony on the second floor of the university’s cultural hall, with Australian Prime Minister Tony Abbott joining them as they took their seats along with Abe, Cambodian Prime Minister Hun Sen and Thai Prime Minister Prayuth Chan-Ocha in one row on the balcony.

Sitting several seats down from Abe in the same row was Chinese Vice President Li Yuanchao. Indonesian President Joko Widodo sat in the row behind.

Singapore Cabinet ministers including Trade Minister Lim Hng Kiang and Communications Minister Yaacob Ibrahim sat on the first floor of the hall in the front row, along with former premier Goh Chok Tong. As President Tony Tan entered with his wife, people rose to

their feet. An orchestra played as the motorcade carrying Lee arrived at the university.

Ten eulogies Lee Hsien Loong delivered the first of 10 eulogies, followed

by Tan and Goh. A public warning system will sound for 15 seconds for the nation to observe a minute of silence. Lee will be cremated at a private ceremony.

“People decide to brave the heavy rain and send our founding father off, so we do what we can to make them feel more comfortable,” said Tan Ling, 15, a student at Chung

Cheng high school who handed out ponchos to those packing the streets along with about 40 of her school mates.

Hundreds stayed on in the financial district after the procession passed, watching live coverage of the motorcade on a giant screen.

“We are all beneficiaries because of Mr Lee’s foresight and economic policies,” said Chee Junn Yeow, 44, whose wife Brenda sobbed as the gun salute rang out. “Whatever our political differences are, all Singaporeans are here today because of one man -- Mr Lee Kuan Yew.” Bloomberg News

Crowds wait before The State Funeral Procession

U.K. Labour opens up poll lead over Conservatives

ChemChina chairman says hopes to re-list Pirelli in Italy

Foreign loans on projects in Philippines surge

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T

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he U.K.’s opposition Labour Party secured its biggest opinion poll lead since September over Prime Minister David Cameron’s Conservatives, according to YouGov. With the election 39 days away, Labour was backed by 36 percent of those surveyed by YouGov for the Sunday Times, with the Conservative Party trailing at 32 percent. The figures would give Labour 314 parliamentary seats to 251 for the Tories, the newspaper reported.

The survey was the biggest since Thursday’s televised interviews with Cameron and Labour leader Ed Miliband. Contrary to a snap survey taken immediately after those appearances, the YouGov poll showed 49 percent thought Miliband came over best compared with 34 percent for Cameron. The survey polled 1,799 adults over the last two days. No margin of error was given.

A separate poll by Opinium for the Observer foretold a closer election result on May 7, with both parties tied at 34 percent support. That marked a decline of two percentage points from a week ago for the Conservatives.

Bloomberg News

he chairman of China National Chemical Corp (ChemChina) said yesterday he hopes to re-list Italy’s Pirelli on the Italian stock exchange after his firm agreed earlier this month to acquire the world’s fifth-largest tyre maker.

Ren Jianxin also warned that a counterbid for Pirelli would hurt the Italian firm’s investors and long-term strategy. ChemChina has agreed to become majority owner of Pirelli as part of a multi-layered 7.3 billion euro (US$8 billion) deal, putting one of Italy’s storied manufacturing names in Chinese hands.

“We were worried that due to cheap liquidity, there might be blind competition,” Ren told reporters. “But a counterbid will hurt Pirelli investors and also its long-term strategy.”

On Thursday, Pirelli CEO Marco Tronchetti Provera told Reuters his firm is not talking to others about a possible counterbid.

Ren is betting the Pirelli acquisition will accelerate the transformation of state-owned ChemChina’s tyre and rubber business.

Reuters

he overall net commitment for projects and programs in the Philippines funded under the official development assistance (ODA) rose to US$11.29 billion in the fourth quarter of 2014, the National Economic and Development Authority (NEDA) said yesterday.

The fourth quarter figure was US$3.18 billion higher than the US$8.11 billion recorded in the fourth quarter of 2013.

“The said net commitment consists of 13 program loans amounting to US$4.09 billion and 62 percent project loans amounting to US$7.21 billion,” NEDA said, adding that the infrastructure sector had the largest share at 40.2 percent.

The World Bank was the biggest source of loans during the last quarter of 2014, with a 39.5 percent share worth to US$4.46 billion.

The Japan International Cooperation Agency came second with US$3.41 billion, followed by the Asian Development Bank with US$2.23 billion.

The total assistance from the said three sources of loans amounting to US$10.10 billion constitutes 89 percent of the total 2014 portfolio.

Xinhua